The Co-operative Group is to off-load 100 poorly performing stores as it tidies up its portfolio.
Most of the stores being sold are from the former Alldays and Balfour chains, which the co-op bought in October 2002 and July 2003 respectively.
All stores will be sold on the open market, although the society has admitted that a number will have to be closed. “In acquiring these businesses we did not expect all stores to meet our requirements and it was always our intention to dispose of those which did not,” said a spokesman.
“It’s not all doom and gloom or all about getting rid of stores, we are simply managing our
portfolio. We are still in the business of acquisitions and so far this year we have already acquired 20 new stores and have another 20 in the pipeline.” Earlier this year, chief executive Martin Beaumont announced that he was to slash 600 jobs at the society’s HQ in a £50m cost-cutting and efficiency drive to counter falling sales.Food group profits fell 39% to £74.5m on sales of £3.44bn, down 0.8%, for the year to January 8. It is nearing the end of a 90-day consultation process about the job cuts.
Meanwhile, the OFT is looking into United Co-operatives’ proposed acquisition of Morrisons’ Saltney store near Chester, announced last week.
The OFT has asked for further comments despite United having been named in 2003 as an effective competitor in the Competition Commission’s report on Morrisons’ acquisition of Safeway.
General manager of United Co-op’s Food Group, Tim Hurrell, said: “We are hopeful of a positive outcome.” And Carl Bradbrook, senior consultant with location planning consultants CACI, was surprised that this case would need any further consultation.
He said: “The location and layout of this store has meant that other grocers, such as Waitrose, are probably not interested. Therefore, many would have thought the OFT would have been happy that United has stepped forward offering to buy this store in this highly competitive area.”
The OFT looks set to allow Netto’s takeover of Morrisons’ Bury Road store in Bolton, despite originally deciding that the discounters did not constitute effective competition.
Fiona McLelland, Ronan Hegarty